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Regal Beloit (RBC) Plagued by Various Macroeconomic Issues
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On Jun 14, Zacks Investment Research updated the research report on industrial goods manufacturer Regal Beloit Corporation (RBC - Free Report) .
Headquartered in Beloit, WI, Regal Beloit is a leading manufacturer of electrical and mechanical motion control products. The company offers a wide array of stock model and customized electric motors, blowers, electric generators, transfer switches, switchgear, valves, gearboxes, power generation components and controls. Regal Beloit has manufacturing, sales and service facilities throughout the U.S., Canada, Mexico, Europe and Asia and markets its products to a diversified customer base across the globe including OEMs, distributors and end users.
Macroeconomic Headwinds
Regal Beloit reported lackluster first-quarter 2016 results with a significant year-over-year decline in net sales and adjusted earnings owing to macroeconomic woes. Adjusted earnings for first-quarter 2016 were 95 cents per share compared with $1.21 in the year-ago quarter and well behind the Zacks Consensus Estimate of $1.09.
Net sales fell to $818.2 million from $911.7 million in the year-earlier quarter owing to adverse foreign currency translation, soft oil & gas markets and a depressed Chinese economy. Quarterly revenues also missed the Zacks Consensus Estimate of $855 million.
Note that the electric motor manufacturing is a highly competitive and fragmented industry. With intensifying competition, Regal Beloit is witnessing a decline in its product prices, which is denting its overall margin. Moreover, the company has to continually invest heavily in R&D to introduce newer value-added products that cushion it against competition. All these limit the company’s profitability to some extent.
Regal Beloit also faces increased concentration risks as a significant amount of its revenue is obtained from a handful of customers. Loss of any of these customers could adversely impact the company’s top line.
Nevertheless, Regal Beloit continues to focus on prudent investment decisions for disciplined capital allocation, strong and flexible balance sheet position and cash flow enhancement to support dividend growth. We believe that such moves along with its robust operating platform and an efficient management team will help in the execution of its strategic priorities and drive net asset value and dividend growth in the future.
Stocks to Consider
Regal Beloit currently carries a Zacks Rank #5 (Strong Sell). Stocks that look promising in the industry include Eaton Corporation plc (ETN - Free Report) , EnerSys (ENS - Free Report) and ESCO Technologies Inc. (ESE - Free Report) , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
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Regal Beloit (RBC) Plagued by Various Macroeconomic Issues
On Jun 14, Zacks Investment Research updated the research report on industrial goods manufacturer Regal Beloit Corporation (RBC - Free Report) .
Headquartered in Beloit, WI, Regal Beloit is a leading manufacturer of electrical and mechanical motion control products. The company offers a wide array of stock model and customized electric motors, blowers, electric generators, transfer switches, switchgear, valves, gearboxes, power generation components and controls. Regal Beloit has manufacturing, sales and service facilities throughout the U.S., Canada, Mexico, Europe and Asia and markets its products to a diversified customer base across the globe including OEMs, distributors and end users.
Macroeconomic Headwinds
Regal Beloit reported lackluster first-quarter 2016 results with a significant year-over-year decline in net sales and adjusted earnings owing to macroeconomic woes. Adjusted earnings for first-quarter 2016 were 95 cents per share compared with $1.21 in the year-ago quarter and well behind the Zacks Consensus Estimate of $1.09.
Net sales fell to $818.2 million from $911.7 million in the year-earlier quarter owing to adverse foreign currency translation, soft oil & gas markets and a depressed Chinese economy. Quarterly revenues also missed the Zacks Consensus Estimate of $855 million.
REGAL BELOIT Price and Consensus
REGAL BELOIT Price and Consensus | REGAL BELOIT Quote
Note that the electric motor manufacturing is a highly competitive and fragmented industry. With intensifying competition, Regal Beloit is witnessing a decline in its product prices, which is denting its overall margin. Moreover, the company has to continually invest heavily in R&D to introduce newer value-added products that cushion it against competition. All these limit the company’s profitability to some extent.
Regal Beloit also faces increased concentration risks as a significant amount of its revenue is obtained from a handful of customers. Loss of any of these customers could adversely impact the company’s top line.
Nevertheless, Regal Beloit continues to focus on prudent investment decisions for disciplined capital allocation, strong and flexible balance sheet position and cash flow enhancement to support dividend growth. We believe that such moves along with its robust operating platform and an efficient management team will help in the execution of its strategic priorities and drive net asset value and dividend growth in the future.
Stocks to Consider
Regal Beloit currently carries a Zacks Rank #5 (Strong Sell). Stocks that look promising in the industry include Eaton Corporation plc (ETN - Free Report) , EnerSys (ENS - Free Report) and ESCO Technologies Inc. (ESE - Free Report) , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>